“For around the lowest half of graduate earners, their loan balance – whether its £40,000 or £100,000 – and any accrued interest, won’t have any impact on the amount they repay.
In previous years, anyone earning less than the £27,295 threshold has had their loan increased in line with with the Retail Prices Index – one measure of– and those who earn more have accrued interest at an even faster rate, up to RPI plus 3 per cent.
Ms Ogden said that someone with a student loan of £100,000 would currently need to be earning £106,000 a year to reduce the size of their loan, as if they made less than this, the interest would mean it increased by more than the amount repaid.
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